The Illinois Tuition Tax Credit: Who Gets the Credit? Who Pays the Consequences?

Illinois enacted its tuition tax credit program in 1999 and is one of six states that offer tax credits or deductions for private school tuition. Like these other states, Illinois adopted its law through a legislative act. Recently, tuition tax credits have gained new interest and attention, as some proponents have suggested that tuition tax credits are a politically viable alternative to more controversial voucher programs.

A report by People For the American Way, March 2003

Executive Summary

Illinois enacted its tuition tax credit program in 1999 and is one of six states that offer tax credits or deductions for private school tuition. 1 Like these other states, Illinois adopted its law through a legislative act. 2 Recently, tuition tax credits have gained new interest and attention, as some proponents have suggested that tuition tax credits are a politically viable alternative to more controversial voucher programs. 3 Yet the impact of vouchers and tuition tax credits is strikingly similar, so much so that just last month the Washington Times described Florida’s tax credit law as one of the state’s three “voucher programs.” 4 And the Palm Beach Post has referred to this law as “tax-credit vouchers.” 5

In Illinois and other states, tuition tax credit supporters have borrowed an often-heard theme from voucher advocates, citing tax credits as a way to assist low-income students. 6 Groups that backed the Illinois tuition tax credit law used this message to help rally support, claiming that tax credits would offer the greatest benefit to poor families.

The Institute for Justice, a pro-tax credit organization, explained its backing of the Illinois law this way: “The tax credit will make it easier for … all Illinois parents to send their children to the schools they believe will best meet their children’s needs. Its impact will be greatest on families of modest means, for whom an additional $500, in many cases, will make the difference in being able to afford tuition at the school of the parents’ choice.” [emphasis added] 7 By contrast, opponents of the 1999 law argued that the measure would disproportionately benefit higher-income families whose children were already attending private and parochial schools. Opponents also voiced concern that such a program would decrease already limited resources available for public schools. 8 The debate over who is right can now be answered with clear and convincing data.